Taxing times for Bayern President Hoeneß

It’s half-time in the Ulrich H. tax trial in Munich. Mr Uli Hoeneß just so happens to be Bayern Munich’s President, although the all-conquering Bavarian club were always at pains to stress that this remains very much a private matter for Hoeneß.

What have we learnt from the opening two days of the high-profile case that cuts into the very fabric of German tax-paying society?

1. Hoeneß defence lawyer Hanns Feigen opened proceedings on day one by revealing that his client had cheated the taxman out of €18.5m – €15m more than the original €3.5m listed by the prosecution. Hoeneß denied that he was a “social parasite” after donations of over €5m to charities and good causes.

2. On day 2 further revelations meant that those initial figures started to look a trifle conservative. During detailed interrogation, a tax investigator suggested the sum of €23,7m is more realistic – whilst Ken Heidenreich, spokesman for the Munich State Prosecution, advised that €3,5m should be added to the final owed tax equation. This would mean at least €27,2m in missing taxes.

3. The monetary dimensions mentioned by the witnesses, defence and prosecution are of a humungous nature. A witness revealed that Hoeneß, at one juncture, showed profits of €70m from playing the stock and currency markets. Although the former German international suggested that he had in fact managed to lose money overall.

4. Hoeneß told the Munich court that he stashed away the money in a secret Swiss bank account during years of manic stock and currency “gambling.” The grand scale of this frenzied currency trading is exposed with €150m being traded against the US Dollar. Similar large punts are placed on the Swiss Franc and the Canadian Dollar.

5. German tax law is very complex with over 60% of the published worldwide tax literature being printed in the German language. The maximum punishment for major tax fraud under German law is 10 years jail, but shorter terms, which are often suspended, are more commonly handed out. The State prosecution are seeking a minimum seven-year sentence in this case.

6. Over 50,000 financial transactions have led to a huge paper mountain in the Hoeneß trial. The Bayern President handed over three USB sticks to the authorities with 52,000 pages of data. The tax authorities couldn’t handle the format and therefore had to evaluate the data manually.

7. Public interest in the high-profile case has been intense – the 49 allocated media spots to cover the trial were snapped up within 27 seconds. In an interesting sideshow Champions League holders Bayern Munich play Arsenal tonight at the Allianz Arena. President Hoeneß is expected to attend.

8. Despite widespread criticism of Hoeneß and calls for his resignation, the reigning treble-winners have continually backed their man. Hoeneß’ initial offer to resign last May was rejected by the Supervisory Board.

9. Hoeneß has therefore clung vehemently to his role as Bayern President, amid very public expressions of loyalty from fans and players, and further vocal support from corporate sponsors such as Adidas, Audi, VW, Allianz and Deutsche Telekom.

10. The Hoeneß Verdict was expected to be announced on Thursday but given the scale of the new admissions and revelations – and the introduction of new witnesses (including Hoeneß’ auditor) – further court dates are expected and the verdict is likely to go into extra time.

Mark Lovell

Mark is an English freelance bilingual writer, living and working in Germany since the fall of the Berlin Wall. Interact via Email or follow me on twitter @LovellLowdown and check out my site at www.lovelllowdown.com

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